By Roshan Fernandez
Shares of Sylvamo slipped as the company said it faced first-quarter operational challenges in North America in addition to heavy planned maintenance outages.
Shares fell 13% to $52.33 during Friday's trading, on pace for the largest percentage decrease since August 2023. The stock also hit a 52-week low.
The paper company on Friday said operations and other costs in the first quarter increased by $12 million from the prior quarter as a result of the non-outage-related challenges. The first quarter also included higher costs from planned maintenance outages in North America and Europe.
Chief Executive Jean-Michel Ribieras said the second quarter will be the year's heaviest in terms of outages, and that total maintenance-outage expenses are expected to rise by $36 million in that quarter.
"We expect quarterly earnings to significantly improve in the second half of the year as we benefit from lower planned maintenance outage expenses, improved commercial results and better operations," the company said in its earnings release.
Earnings in Europe and Latin America fell in the quarter due in part to planned maintenance outages.
The Memphis, Tenn.-based company reported a first-quarter profit of $27 million, or 65 cents a share, compared with $43 million, or $1.02 a share, a year earlier.
Excluding one-time items, per-share earnings were 68 cents, a penny shy of the 69 cents that analysts were expecting, according to FactSet.
Revenue fell to $821 million, down from $905 million during the year-earlier quarter. Analysts were expecting $815.9 million. The company said this was also the seasonally weakest quarter for demand in Latin America.
With respect to tariffs, the company said over 90% of its raw materials are locally sourced, with very little coming from China.
The company is expecting adjusted earnings before interest, taxes, depreciation and amortization to be between $75 million and $95 million in the second quarter.
Write to Roshan Fernandez at roshan.fernandez@wsj.com
(END) Dow Jones Newswires
May 09, 2025 13:15 ET (17:15 GMT)
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